Technically, the DXY is budding up against descending trend resistance created when the greenback was able to carve out a multi-year high of 100.39 in March. After a series of lower-lows and lower-highs, traders have been able to create a slight comeback on the ongoing rhetoric of a few Fed presidents.
Supportive comments from Dennis Lockhart (Fed-Atlanta) and James Bullard (Fed-St. Louis) about the potential of a September rate hike are giving traders something to trade; but, if the Fed fails to deliver anything meaningful after month-dropping - if not an outright boost in the Fed funds rate - the dollar could suffer greatly.
Near-term price resistance is seen at 98.10 but has yet been able to close above the major with positive-DMI suggesting weakness in price action.
Employment data has been a key factor because it is likely an indicator of whether or not Fed Chair Janet Yellen will offer a stronger case for a rate hike. Up until the recent FOMC minutes, Yellen has remained rather dovish and has relentlessly commenting on the slack in the labor force.
If non-farm payrolls print larger than expected job additions, the dollar will bid higher to 98.61/65 while a close above the descending trend will confirm the near-term trends strength. If momentum follows, a bid to 99.42 is possible.
However, less than or expected non-farms print could send the dollar lower. Support can be found at 97.1 and 96.53 (corresponding with the 50-day ).
This week's ADP July non-farm employment change came in at 185,000. Economists were looking for 215,000. Last month's print was revised lower from 237,000 to 229,000.
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